Tymoshenko vows to establish relationship of equal partnership with Russia

While many observers expect her to shake up bilateral relations

World

11:15, 25 December 2007

Yulia Tymoshenko, the newly appointed Prime Minister of Ukraine, has pledged that her pro-western governing coalition will seek to "harmonise" relations with Moscow, according to the government’s press-office.

Many observers expected the charismatic 47-year old, who was appointed last week, to shake up bilateral relations between Kiev and Moscow. Relations between the countries have been strained since the Orange Revolution of 2004. The trigger, many thought, would be her plans to cut intermediaries out of the multi-billion-dollar natural gas trade between Ukraine, Russia and central Asian suppliers.

However, in a Financial Times interview, Ms Tymoshenko expressed confidence that the Kremlin was ready to adopt a more transparent gas supply arrangement with Kiev, whose vast pipeline system pumps the majority of Russian supplies to Europe. As proof, she pointed to public comments made on the issue in recent months by Dmitriy Medvedev, the presidential favourite backed by Vladimir Putin, Russia`s outgoing president.

"The leading presidential candidate in Russia, Mr Medvedev, publicly said that the Russian side is not set on any shadowy intermediaries. He said that they are ready to do away with these intermediaries," she said.

At stake is the position of Swiss-registered company RosUkrEnergo, which controls the supply of central Asian gas to Ukraine and significant sales to European markets. The company is owned equally by Russian gas group Gazprom and two Ukrainian businessmen, Dmytro Firtash and Ivan Fursin.

Ms Tymoshenko has called for direct gas supply agreements between Gazprom and Ukraine`s state energy group, Naftogaz. US officials have backed her in criticising the role of intermediaries such as RosUkrEnergo, insisting they pose an energy security risk to Ukraine and Europe, which is itself dependent on Russia for more than a quarter of its gas needs.

While reasserting her resolve on the issue, Ms Tymoshenko pledged to seek pragmatic talks with Moscow to avoid a repeat of the 2006 gas price stand-off that disturbed supplies to Europe.

"I have not returned as premier to strain relations with Russia - this is not my intention. I will strive to establish a relationship of equal partnership," she said.

She said she aimed to have the budget passed this week as well as the swift adoption of state guarantees on debt obligations in order to reassure increasingly edgy investors with debt interests in Naftogaz.

"It is very difficult to bring in a completely new government just a week before the New Year, evermore so considering that so many problems have piled up. We will probably break the Guinness World Records by adopting a new budget within several days," she said.

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